##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2007
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 Commission File Number: 000-24799
 THE CORPORATE EXECUTIVE BOARD COMPANY
  Delaware
    
    52-2056410(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)2000 Pennsylvania Avenue, NWSuite 6000Washington, D.C.
    
    20006(Address of principal executive offices)
    
    (Zip Code)
 (202) 777-5000
  Not applicable.
  þ o
  þ o o
 o þ




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THE CORPORATE EXECUTIVE BOARD COMPANY
 INDEX TO FORM 10-Q
 PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets at June 30, 2007 and December 31, 2006
3Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2007 and 2006
4Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2007 and 2006
5Notes to Condensed Consolidated Financial Statements
6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
10Item 3. Quantitative and Qualitative Disclosures about Market Risk
14Item 4. Controls and Procedures
14PART II. OTHER INFORMATIONItem 1. Legal Proceedings
15Item 1A. Risk Factors
15Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
15Item 3. Defaults Upon Senior Securities
15Item 4. Submission of Matters to a Vote of Security Holders
16Item 5. Other Information
16Item 6. Exhibits
16
 2




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PART I. FINANCIAL INFORMATION
 Item 1. Financial Statements.
 THE CORPORATE EXECUTIVE BOARD COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 June 30,
    
    
    December 31,2007
    
    
    2006(Unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    86,124
    
    
    $
    171,367Marketable securities
    
    
    118,329
    
    
    
    119,534Membership fees receivable, net
    
    
    89,033
    
    
    
    153,107Deferred income taxes, net
    
    
    16,070
    
    
    
    15,109Deferred incentive compensation
    
    
    13,170
    
    
    
    13,160Prepaid expenses and other current assets
    
    
    9,729
    
    
    
    9,881Total current assets
    
    
    332,455
    
    
    
    482,158Deferred income taxes, net
    
    
    14,120
    
    
    
    12,896Marketable securities
    
    
    90,021
    
    
    
    196,386Goodwill and other intangibles
    
    
    7,499
    
    
    
    7,826Other non-current assets
    
    
    18,524
    
    
    
    9,801Property and equipment, net
    
    
    47,174
    
    
    
    26,988Total assets
    
    $
    509,793
    
    
    $
    736,055Liabilities and stockholders equityCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    36,491
    
    
    $
    66,773Accrued incentive compensation
    
    
    20,505
    
    
    
    25,062Deferred revenues
    
    
    295,276
    
    
    
    308,671Total current liabilities
    
    
    352,272
    
    
    
    400,506Other liabilities
    
    
    34,010
    
    
    
    17,684Total liabilities
    
    
    386,282
    
    
    
    418,190Stockholders equity:Common stock, par value $0.01; 100,000,000 shares
authorized, 42,989,315 and 42,805,325 shares issued, and
36,156,421 and 38,947,908 shares outstanding at June 30,
2007 and December 31, 2006, respectively
    
    
    430
    
    
    
    428Additional paid-in capital
    
    
    369,710
    
    
    
    353,990Retained earnings
    
    
    253,737
    
    
    
    246,668Accumulated elements of other comprehensive income (loss)
    
    
    424
    
    
    
    (440
    )Treasury stock, at cost, 6,875,787 and 3,857,417 shares
at June 30, 2007 and December 31, 2006, respectively
    
    
    (500,790
    )
    
    
    (282,781
    )Total stockholders equity
    
    
    123,511
    
    
    
    317,865Total liabilities and stockholders equity
    
    $
    509,793
    
    
    $
    736,055
  3




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THE CORPORATE EXECUTIVE BOARD COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
 Three months ended June 30,
    
    
    Six months ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues
    
    $
    129,697
    
    
    $
    111,662
    
    
    $
    254,222
    
    
    $
    216,731Cost of services
    
    
    47,264
    
    
    
    39,059
    
    
    
    91,940
    
    
    
    76,519Gross profit
    
    
    82,433
    
    
    
    72,603
    
    
    
    162,282
    
    
    
    140,212Costs and expenses:Member relations and marketing
    
    
    37,482
    
    
    
    31,925
    
    
    
    71,728
    
    
    
    60,775General and administrative
    
    
    18,908
    
    
    
    15,498
    
    
    
    36,025
    
    
    
    30,525Depreciation and amortization
    
    
    3,165
    
    
    
    2,425
    
    
    
    6,071
    
    
    
    4,422Total costs and expenses
    
    
    59,555
    
    
    
    49,848
    
    
    
    113,824
    
    
    
    95,722Income from operations
    
    
    22,878
    
    
    
    22,755
    
    
    
    48,458
    
    
    
    44,490Other income, net
    
    
    5,289
    
    
    
    6,128
    
    
    
    11,204
    
    
    
    12,228Income before provision for income taxes
    
    
    28,167
    
    
    
    28,883
    
    
    
    59,662
    
    
    
    56,718Provision for income taxes
    
    
    10,844
    
    
    
    11,120
    
    
    
    22,969
    
    
    
    21,836Net income
    
    $
    17,323
    
    
    $
    17,763
    
    
    $
    36,693
    
    
    $
    34,882Earnings per share:Basic
    
    $
    0.47
    
    
    $
    0.44
    
    
    $
    0.97
    
    
    $
    0.87Diluted
    
    $
    0.46
    
    
    $
    0.43
    
    
    $
    0.96
    
    
    $
    0.85Dividends per share
    
    $
    0.40
    
    
    $
    0.30
    
    
    $
    0.80
    
    
    $
    0.60Weighted average shares used in the calculation of
earnings per share:Basic
    
    
    37,051
    
    
    
    40,394
    
    
    
    37,732
    
    
    
    40,026Diluted
    
    
    37,517
    
    
    
    41,233
    
    
    
    38,311
    
    
    
    41,241
  4




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THE CORPORATE EXECUTIVE BOARD COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Six months endedJune 30,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    36,693
    
    
    $
    34,882Adjustments to reconcile net income to net cash flows provided by operating activities:Depreciation and amortization
    
    
    6,071
    
    
    
    4,424Deferred income taxes, net
    
    
    709
    
    
    
    21,960Share-based compensation
    
    
    12,102
    
    
    
    13,099Excess tax benefits from share-based compensation arrangements
    
    
    (1,966
    )
    
    
    (18,180
    )Amortization of marketable securities discounts, net
    
    
    (657
    )
    
    
    (932
    )Changes in operating assets and liabilities:Membership fees receivable, net
    
    
    64,074
    
    
    
    43,416Deferred incentive compensation
    
    
    (10
    )
    
    
    460Prepaid expenses and other current assets
    
    
    152
    
    
    
    (4,791
    )Other non-current assets
    
    
    (4,895
    )
    
    
    (6,206
    )Accounts payable and accrued liabilities
    
    
    (34,130
    )
    
    
    (11,595
    )Accrued incentive compensation
    
    
    (4,557
    )
    
    
    (7,980
    )Deferred revenues
    
    
    (13,395
    )
    
    
    (6,966
    )Other liabilities
    
    
    3,449
    
    
    
    3,257Net cash flows provided by operating activities
    
    
    63,640
    
    
    
    64,848Cash flows from investing activities:Purchases of property and equipment, net
    
    
    (9,183
    )
    
    
    (8,116
    )Cost method investment
    
    
    (3,829
    )
    
    
    Sales and maturities (purchases) of marketable securities, net
    
    
    108,141
    
    
    
    (194,787
    )Net cash flows provided by (used in) investing activities
    
    
    95,129
    
    
    
    (202,903
    )Cash flows from financing activities:Proceeds from the exercise of common stock options
    
    
    529
    
    
    
    2,630Proceeds from the issuance of common stock under the employee stock purchase plan
    
    
    1,125
    
    
    
    912Excess tax benefits from share-based compensation arrangements
    
    
    1,966
    
    
    
    18,180Purchase of treasury shares
    
    
    (218,009
    )
    
    
    (58,363
    )Payment of dividends
    
    
    (29,623
    )
    
    
    (23,954
    )Reimbursement of common stock offering costs
    
    
    
    
    
    
    70Payment of common stock offering costs
    
    
    
    
    
    
    (70
    )Net cash flows used in financing activities
    
    
    (244,012
    )
    
    
    (60,595
    )Net decrease in cash and cash equivalents
    
    
    (85,243
    )
    
    
    (198,650
    )Cash and cash equivalents, beginning of period
    
    
    171,367
    
    
    
    424,276Cash and cash equivalents, end of period
    
    $
    86,124
    
    
    $
    225,626
  5




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THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Description of operations
  Note 2. Condensed consolidated financial statements
   Note 3. Recent accounting pronouncements
    6




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Note 4. Stockholders equity
 Share-based compensation
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Cost of services
    
    $
    2,587
    
    
    $
    3,242
    
    
    $
    5,863
    
    
    $
    6,328Member relations and marketing
    
    
    1,194
    
    
    
    1,426
    
    
    
    2,525
    
    
    
    2,933General and administrative
    
    
    1,738
    
    
    
    1,896
    
    
    
    3,714
    
    
    
    3,8385,519
    
    
    
    6,564
    
    
    
    12,102
    
    
    
    13,099Income tax benefit
    
    
    (2,125
    )
    
    
    (2,527
    )
    
    
    (4,657
    )
    
    
    (5,043
    )Total share-based compensation, net of tax benefit
    
    $
    3,394
    
    
    $
    4,037
    
    
    $
    7,445
    
    
    $
    8,056
     Share Repurchases
  Dividends
  Note 5. Income taxes
  7




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Note 6. Sale of common stock
    Note 7. Earnings per share
  Three months ended June 30,
    
    
    Six months ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Basic weighted average common shares outstanding
    
    
    37,051
    
    
    
    40,394
    
    
    
    37,732
    
    
    
    40,026Dilutive common shares outstanding
    
    
    466
    
    
    
    839
    
    
    
    579
    
    
    
    1,215Diluted weighted average common shares outstanding
    
    
    37,517
    
    
    
    41,233
    
    
    
    38,311
    
    
    
    41,241
 Note 8. Comprehensive income
  8




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Note 9. Commitments and contingencies
    Note 10. Subsequent events
 Share Repurchases
  Acquisition
  Dividends
  9




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Business Overview
      10




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Critical Accounting Policies
  Results of Operations
  Three months ended June 30,
    
    
    Six months ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of services
    
    
    36.4
    
    
    
    35.0
    
    
    
    36.2
    
    
    
    35.3Gross profit
    
    
    63.6
    
    
    
    65.0
    
    
    
    63.8
    
    
    
    64.7Costs and expenses:Member relations and marketing
    
    
    28.9
    
    
    
    28.6
    
    
    
    28.2
    
    
    
    28.0General and administrative
    
    
    14.6
    
    
    
    13.9
    
    
    
    14.2
    
    
    
    14.1Depreciation and amortization
    
    
    2.4
    
    
    
    2.2
    
    
    
    2.4
    
    
    
    2.0Total costs and expenses
    
    
    45.9
    
    
    
    44.6
    
    
    
    44.8
    
    
    
    44.2Income from operations
    
    
    17.6
    
    
    
    20.4
    
    
    
    19.1
    
    
    
    20.5Other income, net
    
    
    4.1
    
    
    
    5.5
    
    
    
    4.4
    
    
    
    5.6Income before provision for income taxes
    
    
    21.7
    
    
    
    25.9
    
    
    
    23.5
    
    
    
    26.2Provision for income taxes
    
    
    8.4
    
    
    
    10.0
    
    
    
    9.0
    
    
    
    10.1Net income
    
    
    13.4
    %
    
    
    15.9
    %
    
    
    14.4
    %
    
    
    16.1
    %
 Three and Six Months Ended June 30, 2007 and 2006
 Revenues.
 Cost of services.
 11




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Gross profit.
 Member relations and marketing.
 General and administrative.
 Depreciation and amortization.
 Other income, net.
 12




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Provision for income taxes.
 Liquidity and Capital Resources
  Cash flows from operating activities.
 Cash flows from investing activities.
 Cash flows from financing activities.
  13




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Contractual obligations
   Off-Balance Sheet Arrangements
  Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  Interest rate risk
  Foreign currency exchange rate risk
  Item 4. Controls and Procedures.
  14




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PART II. OTHER INFORMATION
 Item 1. Legal Proceedings.
  Item 1A. Risk Factors.
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 Issuer Purchases of Equity Securities
 Total Number ofShares
    
    
    Approximate $Average
    
    
    Purchased as
    
    
    Value of SharesTotal
    
    
    Price
    
    
    Part of a
    
    
    That May Yet BeNumber of
    
    
    Paid Per
    
    
    Publicly
    
    
    PurchasedShares Purchased
    
    
    Share
    
    
    Announced Plan
    
    
    Under the PlansApril 1, 2007 to April 30, 2007(1)
    
    
    3,889
    
    
    $
    65.79
    
    
    
    3,889
    
    
    $
    115,561,408May 1, 2007 to May 31, 2007(1)
    
    
    626,506
    
    
    $
    64.80
    
    
    
    626,506
    
    
    $
    74,962,408June 1, 2007 to June 30, 2007(1)
    
    
    770,424
    
    
    $
    65.88
    
    
    
    770,424
    
    
    $
    24,209,613
    (2)Total
    
    
    1,400,819
    
    
    $
    65.40
    
    
    
    1,400,819
 
 (1)
    
    Amounts include the effect of employees using common stock received from the exercise
of share-based awards to satisfy the statutory minimum federal and state withholding
requirements generated from the exercise of such awards. In effect, the Company
repurchased, at fair market value, a portion of the common stock received by employees upon
exercise of their awards. The Company repurchased approximately 48,319 shares for $3.2
million.(2)
    
    In July 2007, the Companys Board of Directors authorized a share repurchase of up to
an additional $125 million of the Companys common stock, which when combined with the
remaining balance of the existing share repurchase authorizations, provided the Company the
opportunity to repurchase up to $149.2 million of the Companys outstanding common stock as
of the date of the additional share repurchase authorization in July 2007.  Item 3. Defaults Upon Senior Securities.
  15




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Item 4. Submission of Matters to a Vote of Security Holders.
  Proposal Number 1  Election of directors.
 SHARES
    
    SHARESVOTED FOR
    
    WITHHELDJames J. McGonigle
    
    
    34,360,879
    
    
    
    456,198Thomas L. Monahan III
    
    
    34,461,229
    
    
    
    355,848Robert C. Hall
    
    
    33,605,753
    
    
    
    1,211,324Nancy J. Karch
    
    
    34,602,319
    
    
    
    214,758David W. Kenny
    
    
    33,618,894
    
    
    
    1,198,183Daniel O. Leemon
    
    
    33,619,148
    
    
    
    1,197,929
 Proposal
Number 2  Approval of the Companys 2004 Stock Incentive Plan as proposed to be amended.
  SHARES VOTED FOR
    
    
    24,910,255SHARES VOTED AGAINST
    
    
    7,385,644SHARES VOTED TO ABSTAIN
    
    
    344,127
 Proposal Number 3  Ratification of the appointment of Ernst & Young LLP as independent
registered public accounting firm for the year ended December 31, 2007.
  SHARES VOTED FOR
    
    
    34,601,719SHARES VOTED AGAINST
    
    
    9,566SHARES VOTED TO ABSTAIN
    
    
    205,793
 Item 5. Other Information.
  Item 6. Exhibits.
  Exhibit No.
    
    Description31.1
    
    Certification of the Chief Executive Officer pursuant to Rule 13a  14(a) of the
Securities Exchange Act of 1934, as amended31.2
    
    Certification of the Chief Financial Officer pursuant to Rule 13a  14(a) of the
Securities Exchange Act of 1934, as amended32.1
    
    Certifications pursuant to 18 U.S.C. Section 1350
 16




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SIGNATURES
  THE CORPORATE EXECUTIVE BOARD COMPANY
                    (Registrant)Date: August 9, 2007
    By:
    /s/ Timothy R. YostTimothy R. YostChief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer) 17




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Exhibit Index
 Exhibit No.
    
    Description31.1
    
    Certification of the Chief Executive Officer pursuant to Rule 13a  14(a) of the
Securities Exchange Act of 1934, as amended31.2
    
    Certification of the Chief Financial Officer pursuant to Rule 13a  14(a) of the
Securities Exchange Act of 1934, as amended32.1
    
    Certifications pursuant to 18 U.S.C. Section 1350
 18